Conservative prospects at the next election depend to a considerable extent on the condition of the economy. George Osborne, writing in The Sunday Telegraph, is already moving to blame Britain’s flat-lining economy on the impact of the uncertainty which stems from the eurocrisis. If there is no resolution and Britain is hit even more severely in a continent-wide downturn, David Cameron and Mr Osborne know that they will find it difficult to beat Labour. They are desperate for the eurozone countries to come up with a solution which restores stability and avoids a re-run of the depression of the 1930s. The Prime Minister and the Chancellor have alighted on demands for members of the eurozone to integrate themselves so that they are run in effect by a single government, with Germany and the richer economies guaranteeing the debts of the weaker countries. That way, runs the argument, the euro and the European economy might be saved from a looming collapse which would damage the UK’s trade. Mr Cameron has been particularly vociferous, last week urging the members of the stricken eurozone to get on with integration. Being outside the euro, Britain would not take part in any new arrangements.

Do Cameron and Osborne expect it to work?

It may be that they are advocating integration out of diplomatic necessity, so that it sounds in Berlin, Paris, Brussels and Europhile Nick Clegg’s office as though they are trying to make a constructive contribution. William Hague, the Foreign Secretary, who opposed the creation of the euro so trenchantly when he was Tory leader between 1997 and 2001, has been the driver of UK government policy on Europe and he certainly thinks that the single currency in its current form is probably doomed. The danger for the Tory leadership is that they end up identified with a policy which their party doesn’t like but which then fails anyway.

There is considerable disquiet, which is likely to manifest itself when Parliament returns from recess this week. The mainstream Tory position has long been to oppose further integration, and of late to look for opportunities to renegotiate the terms of our membership of the EU. A senior Conservative says: “It is immoral for us to be suggesting a course of action, the creation of a country called Europe, which we know is undemocratic and will not work. The eurozone countries are heading for a brick wall and we are encouraging them to put their foot down on the accelerator.” Eurosceptic ministers are uneasy, with Iain Duncan Smith, the Work and Pensions Secretary, and Owen Paterson, the Northern Ireland Secretary, both arguing that the UK government should be encouraging the eurozone to face up to the truth that the single currency has been a disaster which should be abandoned. Others are less emphatic, arguing that in such a fast-moving crisis Britain should not be boxed in by making melodramatic declarations. Elsewhere, Tory MPs are focusing their demands on calls for a referendum on the UK’s relationship with Europe, but despite the clamour that isn’t as straightforward as it sounds.

What would a referendum be on?

That is the “six million euro question”. The many Tory and Ukip voters who want Britain to leave the EU think it should be a straightforward “in/out” question, and that Britain would then move to a trading partnership with the EU. Other Tory Eurosceptics hope to salvage something from the wreckage of the single currency, and renegotiate so that the UK remains a member of the EU but on a much looser basis. The Tory leadership’s fear is that the Tory party would be split in any kind of referendum. However, the stresses of the eurozone crisis mean that pressure will continue to build for the issue to be settled definitively.

Will the Tories pledge a referendum?

There has been much speculation recently that the Chancellor and the Prime Minister are edging towards offering a vote on Europe in their party’s next manifesto, especially with Labour dropping hints that it will advocate a referendum. What Mr Osborne and Mr Cameron envisage remains unclear, but so far the Tory leadership’s case seems to consist mainly of pointing out that they have introduced a so-called “referendum lock”, which stipulates that the loss any of additional powers to the EU will trigger a referendum. That is something of a smoke-screen, as there is no likelihood of any more powers being transferred. The most likely short-term outcome of Tory wrangling is that the Hague position wins out. It can be summarised as waiting to see what happens.